Legal Analysis of Inventory Proceedings in Goa: A Case of Property Inheritance and Auction Failure

The judgment in question arises from the appeals filed in the Supreme Court of India, challenging the decisions of the Bombay High Court. The core issue in this case revolves around inventory proceedings under the Portuguese Civil Procedure Code and the right to inherit property acquired in an auction within those proceedings. The appeals concern a property dispute arising from the estate of Lt. Guilherme Caetano Souza and his wife, Maria Guilhermina Augusta Lourdes Aguiar Souza, and the subsequent licitation (auction) involving the estate’s properties.

In this case, the appellant, Mrs. Ethel Lourdes D’Souza Lobo, contends against the ruling of the Bombay High Court, which favored the heirs of Hermano, a deceased bidder in an auction for Item No. 1 of the estate. The property in dispute had undergone a licitation process in which Hermano was the successful bidder, but the amount for the property was not paid before his death. The appellant argues that Hermano’s heirs should not inherit his rights to the property, as the bid amount was never deposited and the auction was incomplete.

The case involves a detailed analysis of the provisions of the Portuguese Civil Procedure Code, particularly Articles 1369 to 1447, which govern the inventory proceedings. Inventory proceedings are designed to identify and divide the assets of a deceased person among the heirs. In this case, the dispute primarily concerns the successful bid for property during the auction, which Hermano won but failed to pay for before his death.

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The legal question at hand is whether Hermano’s heirs can inherit the rights to the property he bid on despite the failure to deposit the auction amount. The appellant argues that since the bid was not fulfilled, the property should be reauctioned, and Hermano’s heirs cannot claim any right to the property. The respondents, on the other hand, argue that Hermano’s heirs are entitled to the property, as the bid was valid, and they inherited his rights.

Here are the main points raised by the petitioner and the respondents:

• Petitioner’s Argument: The petitioner, represented by Mr. Keane Sardinha, argued that the right to claim the property through the auction is not a heritable right. Since Hermano did not deposit the required amount, the auction was void, and no rights could pass to his heirs. The petitioner cited the failure of the previous auction in 2001 for the same property as a precedent for declaring the auction void.
• Respondent’s Argument: Ms. Vibha Dutt Makhija, representing the respondent, argued that inventory proceedings are not partition suits and are instead designed to identify and apportion the estate of a deceased person. The respondent further contended that Hermano’s heirs were entitled to inherit his rights, as these rights were part of his estate and not personal to him.

The Court analyzed the application of several legal provisions, including Article 1737 of the Portuguese Civil Code, which defines inheritance as encompassing all properties, rights, and obligations of the deceased. The Court held that Hermano’s bid, though unfulfilled, was part of his inheritance and could be inherited by his legal heirs.

In its judgment, the Court emphasized that the right to participate in an auction and bid on property in an inventory proceeding is not merely a personal right that dies with the individual. Instead, it is considered part of the deceased’s estate, which can be inherited by their heirs. The Court further stated that the requirement for paying the owelty amount (the adjustment amount for properties acquired in excess) is a procedural matter, which does not affect the inheritable nature of the bid rights.

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After considering both the petitioner’s and respondent’s arguments, the Court concluded that the appellant’s challenge lacked merit. The appeal was dismissed, and the decision of the High Court was upheld. The Court also noted that the interpretation of the legal provisions in this case was consistent with the general principles of inheritance and succession under the Portuguese Civil Code.

Judge S. Ravindra Bhat and Judge Sudhanshu Dhulia delivered the judgment, with both judges agreeing on the dismissal of the appeal.

Petitioner Name: Mrs. Ethel Lourdes D’Souza Lobo.
Respondent Name: Lucio Neville Jude De Souza & Ors..
Judgment By: Justice S. Ravindra Bhat, Justice Sudhanshu Dhulia.
Place Of Incident: Goa.
Judgment Date: 19-09-2022.

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